DECLINING PERCENTAGE OF HOME OWNERSHIP - Is It A Permanent Trend?
PERCENTAGE OF AMERICANS WHO OWN HOMES FELL 2.3% IN SECOND QUARTER, 2009 - A FALL OFF OF NEARLY 2 MILLION HOMEOWNERS!
The High Water Mark of Home Ownership across the U.S. occurred in mid-2005. Since that time, staggering levels of home foreclosures, tight credit, and a weakened economy has eroded the percentage of Americans who call themselves homeowners.
During the Second Quarter, 2009, an estimated 67.4% of Americans owned homes, down from a 69% average earlier this year. (See Dan Voorhis' story in The Chicago Tribune).
Where do the ex-homeowners go? Many become renters, some move in with family.
But is this decline a temporary one? Or will changing demographic trends - the aging of the population, and more of a positive attitude toward frugality - drive down the home ownership percentage and keep it low, on a more permanent basis? Between 1965 and 1995, home ownership as a percentage of the population averaged 65%, although it fluctuated somewhat during stalled economic times.
Landlords? They might benefit from the increased number of renters in the marketplace. Further, as the U.S. Population continues to grow older, on average, a greater percentage of the older folks may elect to rent their home, rather than own it. Indeed, people over the age of 75 tend to rent more than they own.
In one study, Arthur Nelson, a Professor with the University of Utah, estimates that home ownership will decline over the next two decades or so to around 64%, and perhaps as low as 60%, of the population. The 64% level is where it stood in 1990, 19 years ago.
During the housing boom, many viewed owning a home as a sure way to invest and make money. Today, homeowners are uncertain about the future of the housing market, and view owned homes as simply places to live, perhaps more risky than simply renting.
DEAN MOSS & DEAN'S TEAM CHICAGO
